Reports, studies and publications

Deutsche Bank has submitted a Corporate Responsibility Report every year since 2002. The criteria of the Global Reporting Initiative (GRI) serve as our orientation for weighting of thematic areas and collection of key figures. Moreover, we provide research and publications to topics related to our commitment and projects.

Report 2013: ESG Strategy Update

Sustainability is core to the mission of RREEF Real Estate, which seeks to provide our clients with superior long-term returns while appropriately managing risks to our clients. We believe that our commitment to improve environmental performance of our assets under management enhances the risk-adjusted returns we earn for our clients. Our governing policies support fair wages and fair benefits for workers employed by our contractors and subcontractors subject to our fiduciary obligation to our stakeholders. Finally, we recognize that corporate citizenship and stewardship of the planet’s health are important considerations as we create wealth for our clients, employees, vendors and contractors. Being sustainable enhances operating efficiency, addresses client investment criteria, mitigates regulatory and reputational risks, and prevents functional obsolescence of the hard assets we manage for our clients. As recently published research concludes1, we believe that being sustainable will also drive occupancy and enhance riskadjusted returns that we earn for our clients.

As adopted by the United Nations, sustainability is the economic development that meets the needs of the present generation without compromising the ability of future generations to meet their own needs.As expressed in our mission statement, RREEF Real Estate seeks to provide our clients with superior long-term returns while appropriately managing risks to our clients. This goal directly aligns with our commitment to continuously seek improvement in the environmental performance of our assets under management across a variety of value drivers.

Deutsche Bank Markets research studies

ESG (Environmental, Social, and Governance) is an investment approach that takes into account the environmental, social and governance impact when making investment related decisions. The ESG philosophy can take on many forms. It can be as simple as screening out companies from an investor’s universe that rank poorly on ESG criteria. Or the ESG philosophy can take on a much more rigorous approach where investors incorporate specific ESG data towards companies or industries as an integral component of their investment analysis and decision process. The acronym SRI (Social Responsible Investing) is often coined with ESG. The areas concerned with SRI can typically be summarized under environment, social, and governance pillars. In this research, we use SRI and ESG interchangeably.

Socially Responsible Investing (SRI) has come of age as a distinct asset class. A new generation of individual and institutional investors is increasingly recognizing the responsibility and opportunity, they have put their capital to work to affect positive social and environmental change. This momentum is not only being led by sympathetic mission driven institutions like universities, foundations and pension funds but high net worth individuals, as well, many of whom have generated their own wealth and are keen to support others’ entrepreneurial efforts that can lead to positive outcomes for society.

Deutsche Bank Climate Change Advisors Investment Research

The food for fuel debate reached a crescendo during the summer of 2008 as food prices soared to all time highs. As the financial crisis began to take hold of the global economy, energy prices sank and along with them, agricultural commodity prices. Many of the voices in the debate attributed the rise in food prices to the growing biofuels industry, while others pointed out the role of speculators and commodity funds. Once the bubble burst, the debate over producing fuel over food subsided, and food prices in some regions have come down.

Previous DBCCA research notes have analyzed the role of Germany's Act on Granting Priority to Renewable Energy Sources ("the EEG"1) in catalyzing investment to support the rapid scale-up of renewable electricity generation in Germany.2 Following recent changes to the EEG, this report examines the current status of policy and market conditions in Germany and considers the implications of recent changes for investment in wind, biogas, and solar PV generation.

America now generates more kilowatt-hours of renewable energy than any other country in the world. In addition to creating jobs and bettering the environment, zero-fuel cost renewable generation provides a critical hedge against future increases in fossil fuel prices. Having been growing robustly for over a decade, however, renewable energy in America now faces some major headwinds.

DBCCA has collaborated in the development of a new report by the Calvert Foundation, showing that an overwhelming majority of financial advisors see sustainable and impact investments as an opportunity to grow their practice. These advisors would recommend sustainable investments to roughly one-third of their clients and would allocate 10 to 20% of those portfolios to these products, which means that on average U.S. advisors are willing to place 2.5% of their total assets under management in sustainable investments for a market potential of $650 billion.

The evidence is compelling: Sustainable Investing can be a clear win for investors and for companies. However, many SRI fund managers, who have tended to use exclusionary screens, have historically struggled to capture this. We believe that ESG analysis should be built into the investment processes of every serious investor, and into the corporate strategy of every company that cares about shareholder value. ESG best-in-class focused funds should be able to capture superior risk-adjusted returns if well executed.

In this fifth year of the Investing in Climate Change Series, DBCCA reviews events in the climate change investment markets over the past 18 months and look to a continued megatrend and broadening opportunity set in the coming years. Much commentary is taken up in relation to renewable energy and wind and solar especially. Public equity markets are the most readily accessible source of "performance" indicators. And there is no doubt that there is substantial uncertainty in some countries over policy and the outlook for pure-play companies in these sectors.

China's 12th Five Year Plan sets out ambitious goals for de-carbonizing China's electricity supply, emphasizing a concerted effort to expand all dimensions of renewable and low-carbon electricity sources. In our October 2011 report "Hydropower in China: Opportunities and Risks" we examined China's hydropower ambitions. In this report we examine the wind power and solar power sectors.

Twenty eleven has been a year of remarkable political and economic volatility. Political and civil unrest in much of the Middle East (the "Arab Spring"), Japan's earthquake and tsunami and subsequent nuclear crisis, the European sovereign debt crises, and vast current and projected growth in demand for energy (and other commodities) from emerging economies have all combined to impact markets, including energy, in fundamental ways.

The UK possesses some of the richest offshore wind renewable energy resources in the world with Round 3 offshore wind capacity factors expected to be over 40%. There is currently an installed capacity of ~1.5 GW and in total, under leases conducted to date (Rounds 1, 2, 3, Round 2 extension and Scottish Territorial Waters zones), ~54 GW of potential capacity has been awarded by The Crown Estate for development. The Government has made clear its commitment to offshore wind and in its 2011 Renewable Roadmap sets out an ambition to achieve 18 GW of installed offshore wind capacity by 2020.

Repowering America: Creating Jobs focuses on the job impact of the DBCCA Electricity Power Forecast for the US. The DBCCA Electric Power Forecast for the U.S. calls for a scale up in natural gas and renewable energy (RE) as coal plants are retired and energy efficiency (EE) reduces the rate of growth in electricity demand over the next 20 years. Based on this, we have estimated job forecasts using and expanding a modeling methodology developed at the University of California, Berkeley (henceforth referred to as "WPK"), that was selected after a detailed review of leading U.S. research reports looking at job creation and energy related investments or initiatives.

In late 2010, DBCCA published an analysis concluding that (1) natural gas and renewable energy can play complementary roles in displacing coal-fired generation and lowering greenhouse gases (GHGs) emissions from the US electricity sector through 2030; and (2) at present a gas and renewables combination represents the most logical, politically acceptable, and economically feasible low-carbon energy pathway for the United States. On the supply side, the shale gas revolution remains front and center of this energy transition and continues to gather momentum.

Post Fukushima crisis, Japanese society is seeking ways to dramatically reduce or eliminate nuclear generation while maintaining carbon budgets and improving energy security. Logically, this can only be achieved using conservation and efficiency measures and natural gas as a transition fuel as renewable energy capacity is aggressively built.

During 2010 and to date in 2011 the leaders in climate policy continued to maintain their position, while others have lagged behind or moved backwards. Countries such as Germany, China and increasingly the UK continue to develop strong domestic policies that contribute to global climate change mitigation, Whilst others, such as the US, Russia, Spain and Canada (Ontario) either fail to initiate, or in some cases, even reverse or threaten to reverse, crucial climate policy initiatives. Thus, some policy regimes have succeeded while others have failed, and the key for investors is to identify the winning policy structures which reduce uncertainty. Within this context, we continue to develop our 'best-in-class' climate policy framework, with emphasis on policies directed at clean energy technologies and efficiency.

Germany is poised for continued renewable energy market growth through 2020 and beyond in order to meet binding renewable electricity targets and compensate for its upcoming nuclear power phase out. The German government has convened a commission to discuss the feasibility of accelerating the phase out of nuclear energy all together by 2017-2025. The preliminary findings from the government's study are expected to be released in June 2011 and could further support the development of solar energy beyond the projections discussed in this report.

Energy transitions are inherently lengthy but can be accelerated by material changes in economics, security, public sentiment and regulatory responses to human health, safety and the environment. The world has been battered in 2011 by two very important events that could combine to create an inflection point in energy choices.

A DB Climate Change Advisors (DBCCA) report released today, "Investing in Climate Change 2011", examines the risks associated with climate change investing across different asset classes and provides a framework to understand how asset managers can manage these risks. In the report, DBCCA argues that a major shift in investor attitudes is taking place: leading institutional investors around the world to undertake this analysis because of a growing realization of the potentially profound impact climate change may have on their existing portfolios.

Deutsche Bank Advisors

Corporations increasingly face a new type of shareholder: the shareholder activist. These shareholders use their voting rights to influence the outcomes of management proposals. The rise of shareholder activism suggests that engagement with companies can be an effective approach to socially responsible investing.

Deutsche Bank Americas

Our nation’s multifamily buildings contain billions of dollars of energy savings potential. A 2009 study by McKinsey and Company estimated that the capital required to unlock energy efficiency opportunities in low-income residential buildings between 2009 and 2020 is approximately $46 billion, and would provide a present value of $80 billion in savings. Almost a quarter of this energy efficiency potential is in multifamily buildings. Deutsche Bank Americas Foundation in Cooperation with Living Cities, Study

Deutsche Bank – acting sustainably

Deutsche Bank Research studies

Corn, wheat and soybean prices skyrocketed in June-July although they have slightly decreased in the past few weeks. In July, the cereals price index of the FAO (Food and Agriculture Organization of the UN) went up 17% to reach 260 points, close to the record high of 274 points reached in spring 2008 (the peak in April 2011 was 265). The overall food price index climbed 6% in July to reach 213 points, still far from the peak of 238 reached in February 2011.

Germany's energy turnaround targets objectives that far exceed its legislated, accelerated exit from nuclear power generation. In order for the many energy and climate policy objectives to be met at least EUR 30 bn will have to be invested in Germany annually in areas such as renewable energies, conventional power plant, grids, storage facilities, energy-efficient buildings and alternative propulsion technologies – no small challenge.

High hopes are held of electric mobility. Given that the earth‘s oil reserves are finite and oil prices on the rise, hopes are now being pinned on electricity as an alternative fuel for road transport to point the way out of this cost conundrum‘. If, moreover, the power for electric vehicles is generated from renewable energy sources, it could additionally contribute to climate protection.

Deutsche Bank Climate Change Advisors Investment Research

Following the recent DC Court of Appeals ruling, in this short note we summarize the context of new and proposed EPA regulations and standards for stationary sources of GHG emissions and vehicle emissions, and outline how we believe these contribute to policy TLC in the US.

In this note we examine China's ambitious goal to develop a fleet of 5 million electric vehicles by 2020 (the term "electric vehicles" used here includes plug-in hybrid electric vehicles and pure electric vehicles and does not include traditional hybrid-electric vehicles).1 Such a fleet would represent 43% of the estimated global PHEV/EV fleet and 0.4% of the global passenger vehicle fleet (all engine types).2 Based on the goals and targets set forth in the Ministry of Industry and Information's (MIIT) recently released "China Energy Efficient and New-Energy Vehicles Industrial Plan 2012-2020," we develop a forecast of what we believe is achievable for production and sales and include a review of other market forecasts.

In this report, we have developed our thinking around an enduring evolution toward clean energy and resource technologies. We believe that the first phase of a long-term mega shift toward an end-state scenario of clean, domestic, sustainable and efficient use of energy, materials and environmental services is now firmly established within the corporate world.

Can BICs strength offset OECD weakness? Apart from this being a key question for the overall world economy, we believe this is also a key for investors in clean energy to consider. Some of the OECD economies' ability to fund clean energy incentives is under budgetary pressures and consumer cost constraints while risk aversion continues in capital markets. Longer term, the improved cost competitiveness of clean energy will prove to be the key driver globally.

DB Climate Change Advisors has published its fourth Global Climate Change Policy Tracker report. Key conclusions are as follows: As concluded in our April 2012 Global Climate Policy Tracker, if fully implemented, mandate policies will have more impact than emission targets at lowering emissions (mandates would reduce emissions by ~8.6GtCO2e where as emission targets would reduce emissions by ~7.4 GtCO2e in 2020) on a global basis in February 2012. Disaggregating these mandates into the key three categories, in our February 2012 database, there were a total of 499 mandates: 286 were renewable mandates, 204 were efficiency mandates and 9 were 'other' mandates...

DB Climate Change Advisors has published its fourth Global Climate Change Policy Tracker report. Key conclusions are as follows: Our new consistent historical analysis of maximum potential policy impact on abatement shows continued improvement since the major impact of the Copenhagen Accord. On the best case global outlook, emissions peak in 2016 in line with economic growth in emerging economies and decline slowly to 2020 but still leave a 5.8Gt "gap" compared to a 450ppm stabilization pathway.

Upgrading and replacing energy-consuming equipment in buildings offers an important capital investment opportunity, with the potential for significant economic, climate, and employment impacts. In the United States alone, more than $279 billion could be invested across the residential, commercial, and institutional market segments. This investment could yield more than $1 trillion of energy savings over 10 years, equivalent to savings of approximately 30% of the annual electricity spend in the United States. If all of these retrofits were undertaken, more than 3.3 million cumulative job years of employment could be created.

The December 2011 UN Climate Change Conference in Durban (Conference of the Parties, or COP-17), once again brought together representatives of the world's governments, international organizations and civil society. The discussions sought to advance the implementation of the Kyoto Protocol and the Bali Action Plan and Cancun Agreements. On December 11th, the conference reached an agreement and program to set a new course of action for the global fight against climate change.

On 7 September the State Council issued the "12th Five Year Comprehensive Work Plan for Energy Conservation and Emission Reduction" (the "Work Plan") which sets forth implementation guidelines for energy conservation and emissions reductions. The Work Plan provides insight into the key targets and strategies to achieve a greener society.

Research conclusion and key messages - natural gas offers greenhouse gas advantages over coal: Natural gas has been widely discussed as a less carbon-intensive alternative to coal as a power sector fuel. In April 2011, the U.S. Environmental Protection Agency released revised methodologies for estimating fugitive methane emissions from natural gas systems. These revisions mostly affected the production component of the natural gas value chain (namely, gas well cleanups), causing a very substantial increase in the methane emissions estimate from U.S. natural gas systems.

On June 20, 2011 the U.S. Supreme Court issued its much-anticipated decision in American Electric Power v. Connecticut. This is the second climate change case to be decided by that court and the first to concern common law claims, where the plaintiffs claimed that the greenhouse gases (GHGs) from power plants constitute a common law nuisance, and asked the court to issue an injunction requiring the plants to reduce their emissions.

GET FiT was first conceived in January 2010 when the United Nations Secretary General's Advisory Group on Energy and Climate Change (AGECC) invited Deutsche Bank Climate Change Advisors (DBCCA) to present new concepts to drive renewable energy investment in developing regions. DBCCA responded with the Global Energy Transfer Feed-in Tariffs Program or "GET FiT" program, a proposal to support both renewable energy scale-up and energy access through the creation of new international public-private partnerships.

Over the past year at DBCCA we have written about and commented upon emerging Chinese leadership in the climate and renewable energy world. This comes in the form of the policy momentum and ambition of China's efforts to create a low carbon economy and improve its energy security through ambitious goals in terms of energy intensity targets and renewable energy deployment, backed up by strong incentives encouraging the development of green industries and jobs.

In late 2010, DBCCA and Worldwatch separately published analysis concluding that natural gas and renewable energy can play complementary roles in lowering greenhouse gas (GHG) emissions from the United States' electricity sector by displacing coal-fired generation. Both groups also analyzed the environmental risks associated with the development of natural gas, especially from shale, and concluded that while well-designed and strongly enforced regulations and industry best practices can minimize these risks, such regulations and practices were not yet in place at all operations in all states.

Remuneration

The ethical principles on which management remuneration systems are based are becoming an indispensable factor for sustainable success in the banking sector.Sustainably successful banks form an essential part of the economic and social fabric of stable societies. They perform core service functions for citizens, the economy and the state. They make a significant contribution to maintaining confi-dence in the system and they promote growth and welfare. Consequently, their decision makers carry a large burden of responsibility.